August 18, 2020 (MLN): Meezan Bank Limited has unveiled its financial results for the 1HCY20 ended June 30, 2020. As per results, the bank has reported its net profits of Rs 11.58 billion (EPS: Rs 8.97), showing significant growth of 65.38 % against net profits of Rs 7 billion (EPS: Rs 5.42) of the same period last year.
The robust growth in earnings was attributable to higher Net Spread earned (56% YoY) on the back of volumetric growth in assets driven by Power/Ijarah Sukuk. Moreover, a sharp rate cut did play to the bank’s advantage, AKD research mentioned.
During the period under review, Non-Funded Income (NFI) increased by only 8.6% YoY on the back of higher foreign exchange income, up by 21% YoY along with capital gains of Rs 965 million.
According to a report by EFG Hermes, Fee and commission income took a hit owing to the COVID-19 outbreak, however, a sharp improvement in NIMs offset weaker fee income.
Meanwhile, the overall other expenses surged by 26% on the back of higher operating expenses and workers' welfare funds.
Consolidated Profit and Loss Account for the half-year ended June 30, 2020 ('000 Rupees) | |||
|---|---|---|---|
| Jun-20 | Jun-19 | % Change |
Profit/return earned on Islamic financing and related assets. Investments and placements | 57,832,671 | 40,011,089 | 44.54% |
Profits on deposits and other dues expensed | 25,486,719 | 19,255,013 | 32.36% |
Net spread earned | 32,345,952 | 20,756,076 | 55.84% |
OTHER INCOME |
|
| – |
Fee and commission income | 2,963,134 | 3856279 | -23.16% |
Dividend income | 91,127 | 108,193 | -15.77% |
Foreign exchange income | 1,298,113 | 1,074,466 | 20.81% |
(Loss) / gain on securities-net | 965,629 | (141,029) | – |
Other income | 245,734 | 221,978 | 10.70% |
Total income | 37,909,689 | 25,875,963 | 46.51% |
|
|
| – |
OTHER EXPENSES |
|
| – |
Operating expenses | 14,584,297 | 11,677,102 | 24.90% |
Workers' Welfare Fund | 464,378 | 344,685 | 34.73% |
Other charges | 83,686 | 2,155 | 3783.34% |
Total other expenses | 15,132,361 | 12,023,942 | 25.85% |
| 22,777,328 | 13,852,021 | 64.43% |
Share of results of associates before taxation | (355,942) | (300,731) | 18.36% |
Profit before provisions | 22,421,386 | 13,551,290 | 65.46% |
Provisions and write offs -net | 3,097,096 | 1,052,237 | 194.33% |
Extraordinary / unusual items | – | – | – |
Profit before taxation | 19,324,290 | 12,499,053 | 54.61% |
Taxation | 7,741,200 | 5,495,046 | 40.88% |
Profit after taxation | 11,583,090 | 7,004,007 | 65.38% |
Basic and diluted earnings per share (Rupees) | 8.97 | 5.42 | 65.50% |
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